Tune in to four new realities.

by Jim Collins

In the future walls that have traditionally defined boundaries—what you own, what you control, whom you employ, where they work—will cease to have much meaning. Instead, the defining boundary will be a permeable membrane defined by values, purpose, and goals; organizations will be held together by mechanisms of connection and commitment rooted in freedom of choice, rather than systems of coercion and control. The exercise of leadership is inversely proportional to the exercise of power; hence, the most productive relationships are, at their core, mutual partnerships.

Leaders today need to make four shifts in order to be effective.

1. Define the inside and the outside of the organization by reference to core values and purpose.
   
   Every great organization is characterized by dual actions: preserve the core and stimulate progress. On one hand, it’s guided by a set of core values and purpose that change little, if at all, over time; on the other hand, it stimulates progress—change, improvement, innovation, renewal—in all that is not part of the core values and purpose. In great organizations, core values and purpose remain fixed, while operating practices, cultural norms, strategies, tactics, processes, structures, and methods continually change in response to changing realities.
   
   The organizations that best adapt to a changing world first know what should not change; they have a fixed anchor of guiding principles around which they can more easily change everything else. They know the difference between what is sacred and what is not, between what should never change and what should be always open for change, between what we stand for and how we do things. Core values and purpose provide the glue that holds an organization together as it expands, decentralizes, globalizes, and attains diversity. Core values and purpose define the eternal character of a great organization, the character that endures beyond the presence of any set of people or individual leaders. In the best organizations, leaders are subservient to the core principles. Membership is ultimately defined by shared core values and common purpose.
   
   
2. Build mechanisms of connection and commitment rooted in freedom of choice, rather than relying on systems of coercion and control.
   
   You can’t just establish shared values and common purpose and expect everything to hold together; you also need tangible mechanisms that foster the commitment required to produce results. However, these mechanisms will increasingly rely on commitments freely made and will grant wide operating autonomy, rather than rely on coercion and control.
   
   The commitment plus freedom model requires heavy up-front investment in selecting the right people. It does not try to mold people to be what they are not. People often ask, “How do we get individuals to share our core values?” The answer is, “You can’t.” You can’t open people up and install new core values in them. The key is to find, attract, and select people who have a predisposition to sharing the core values, and to create an environment that consistently reinforces those core values, buttressing it with mechanisms of connection and commitment. If you select the right people in the first place—and they select your organization—you don’t need to control them. They don’t need fixed hours. They don’t need to come into offices where they can be watched. They don’t need rules. You need to guide them, teach them, provide direction, set clear objectives, agree mutually on deadlines, and have mechanisms of commitment and connection—but you don’t need control. Most managers under-invest in the selection process and try to correct for bad choices through control and over-management. If you select the right people, you don’t need to mold people. Indeed, the moment you feel the need to control and mold someone, you’ve made a selection mistake.
   
   
3. Accept the fact that the exercise of true leadership is inversely proportional to the exercise of power.
   
   The best and most innovative work comes only from true commitments freely made between people in a spirit of partnership, not from bosses telling people what to do. Leadership can’t be assigned or bestowed by power or structure; you are a leader if and only if people follow your leadership when they have the freedom not to.
   
   As people become increasingly comfortable with ambiguity, they will trade the single-job model for a multi-client model, thus granting to any single organization or leader less power over their lives and livelihood. All those people who lost their jobs suddenly came to understand that low ambiguity (a single job) comes at the price of high risk (all eggs in one basket). You can already see this change to the lower risk, multi-client model happening as older executives bemoan the “lack of loyalty” in the younger generation. And yet there is no less loyalty in the younger generation. They are simply granting less power to any single organization; they are less subservient because they have more freedom. The moaning executives are confusing subservience to power with loyalty to cause. Executives need to cultivate the latter and relinquish dependence on the former to be effective. We’ll see a shift away from ownership of people in any form, including the traditional job (an advanced form of owning people by owning their time). Every relationship will be viewed as a joint venture.
   
   
4. Embrace the reality that traditional walls are dissolving.
   
   We are moving toward a world in which the concept that walls are necessary is becoming archaic and is no longer useful. The most progressive corporations have jettisoned the idea that they can exist in a walled-off cocoon of private activity. The customer revolution, for example, reflects a dissolution of the walls companies once tried to construct between customers and companies. The social systems best suited in the long run to meeting the material and spiritual needs of most people tend to distribute, rather than concentrated, power.